Scams are an unfortunate aspect of life. A company may look genuine, but in reality, it could turn out to be a scam. Luckily, there are a few things that can throw up a red flag, and help prevent you from falling for one.

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Steps

Part 1 of 5: Registration and solvency

1

Check the registration data for the company website. You can sometimes find the name and information for the person who registered the website, which you may want to use for further research. Something you may want to look at is when the website was created and when it will expire. If it was only created recently and will expire soon, that may point to the website being a temporary cover for a scam.

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2

Look for a listing with the secretary of state and/or a Federal Employer Identification number (USA). A listing shows that they are likely reputable as a business.

Similarly, if the company is based in Australia, they should have an A.B.N. (Australian business number), which can be checked through: Business.gov.au. In some cases, companies without an Australian Tax Office compliant Tax invoice can allow the consumer to legally withhold sales tax at 46.5%.

Registration options vary across countries; check your national company registration process for more details.

3

Check the Better Business Bureau. Lack of a listing does not automatically mean it's a scam, but there may be a listing and it may have reviews stating that it is.

4

Some industries have regulatory bodies they have to be registered to or certifications/licenses that they have to have. It’s worth researching the industry of the company to see if they comply to these regulations.

5

Use a company credit report to check the legitimacy of a company. Using a company check service you can confirm:

a company's credit score,

their contact details,

financial performance,

director structure

how long they've been trading for; and much more.

Part 2 of 5: Contact details

1

Check the website for a legitimate telephone number and address. This is only one sign that it is a genuine company. If there is no way to contact this company offline, it may be a red flag. Since emails and domain names are easy to obtain, having an email address is not as trustworthy as offline contact information.

2

Look in other cities to see if the same business is using the same website for the same business. Use your same search term with a different city name. If you find the same business page for another city, then do not use them. Usually these copied phony business pages are used in many cities and are just copied templates. Many have broken links for images and links which is a tip-off to a phony phishing business page.

These phony sites are usually set up by one SEO expert and duplicated for many large cities. They almost always use form email so you can't track it.

Usually all these fake businesses either use a PO address or try to pay for a piggyback on a real company that does close to the same business, so when you do a look up, the type of business matches even though the name does not.

3

Look-up the website on the IICAN site using their WhoIs command. If the owner is paying to hide the his name identity/address, then run, as it is most likely a phony business. If it is registered to an LLC company, then look them up on the web and see who runs it. If they are located offshore, then do not use them. If they are in the SEO or hosting businesses, do not use them. If it is a phony PO address, do not use them.

These phony business sites or "referral sites" are set up for one thing only. That is to fool you into asking for their services, they then sell their lead(s) to a real business and take a cut. These referral sites do nothing for the industry they claim to work in, but raise the prices of services for all.

4

Note that both phone numbers and addresses are now super easy to fake. There is a whole industry in providing fake area code and 800 numbers. Even Google now does this, so phone numbers are no longer a sign of a real company. Before doing business, call the local chamber of commerce associated with the address and see if they are a real bricks and mortar company or a referral skimming internet company with a phony address and are located states or countries away![1]

Part 3 of 5: How professional is the company's website?

1

Browse the company's website for discrepancies and professionalism. If a website says one thing in one spot, and then contradicts itself in another spot, that's a red flag that the business is not coordinated and may be a scam that was hastily thrown together. If it's unprofessional (for example, there are stolen images and numerous spelling errors), that shows that little thought or care was put into the website.

2

Look for terms and conditions. Legitimate companies will almost always have terms of use or terms and conditions. If they do have terms, read through them carefully for things that sound suspicious.

3

Look for decent content. Phony referral business sites usually don't have much content on the site and usually have lots of legitimate company and BBB logos on their site to trick you into trusting them. A big tip-off are stock photos and no photos of their company building, employees, or products. Avoid the company if all you see are stock photos of their so-called products––this is currently the easiest way to spot a fake web business!

4

If you have any doubts about the company from the webpage, then your first impressions are usually correct. Avoid the company until you know it is genuine.

Part 4 of 5: Payment methods

1

Consider how the company accepts payments. If they only accept payments through insecure or shady measures, that could be a red flag. PayPal is often considered a safe method. Look into payment methods which will allow you to get your money back if things go sour.

Part 5 of 5: Feedback

1

Put the company name into Google. You may turn up some reviews or information on whether the company is a scam or not. If you don't see anything, try "company name scam" and see if results turn up that way. Although it's possible to manipulate a positive online presence, bad feedback is harder to hide.

2

Check the company's customer reviews on review platforms. Unlike personal blogs, review platforms reflect the opinion of various customers and usually provide an unfiltered view on a company's overall reliability. Trustworthy review platforms will not censor reviews in any way and fight hard against fake reviews.

3

Ask for real bricks and mortar references in your area. Call the reference and ask who actually did the work. If it was a different company, then it was contract services from another company they sold the lead to. This is an indication to avoid the company.

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Tips

When you look up reviews, be smart about whose reviews you trust. Some people don't follow all of the directions they were supposed to, or misunderstand the product or terms, and then complain even though it was their mistake.

If you're looking at a business that is run from home, or if it's a really small company, they may not have business listings or long-lasting domains. Some people cannot afford to pay for them on top of other business expenses.

Some hosts keep the information of the domain owner private. This does not necessarily mean it is a scam.

Warnings

If it sounds too good to be true, assume that it is.

Be careful with your information. Don't provide any more than is necessary, and use good judgment when giving it out. If you don't feel 100% sure that the company is genuine, then find another one! With personal information that could ruin your life, it's better to be safe than sorry.

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